Weekly Updates

Market Update - October 28

Fall is upon us (finally!) and the spooky season is in full swing! We have a jam packed weekend with the Inspirada Fall Festival, soccer and tennis for the boys, and we have the pleasure of attending a charity fundraiser for The Animal Foundation at a client's ranch! How are you spending the last weeeknd of October?

And now onto the weekly recap:

2023 Weekly Market Update Cover (1200 × 628 px) (9)

It was a tough week for stocks. At the start of the week, the S&P 500 slipped below its 200-day moving average. By the end of the week, the S&P 500 settled 10.3% lower than the July 31 closing high (i.e. a technical correction) and tested support near the 4,100 level. 

Many stocks participated in a broad retreat. The Invesco S&P 500 Equal Weight ETF (RSP) and the market-cap weighted S&P 500 each fell 2.5% this week. Only one of the 11 S&P 500 sectors logged a gain -- utilities (+1.2%) -- while the communication services (-6.3%) and energy (-6.2%) sectors saw the largest declines.

Weakness in the communication services sector was driven by Alphabet (GOOG), which logged a 9.8% decline on the week after an earnings report that contained some relatively disappointing growth for its cloud business, and Meta Platforms (META), which fell 3.9% following its earnings report. Microsoft (MSFT) and Amazon.com (AMZN) were met with positive reactions after reporting quarterly results. 

Participants were also digesting a slate of mostly better-than-expected earnings results from blue chip names. Verizon (VZ), Coca-Cola (KO), Dow (DOW), RTX (RTX), General Electric (GE), and 3M (MMM) were among the standouts in that respect.

Geopolitical angst contributed to the overall negative bias throughout the week, but tensions peaked on Friday following reports that the US carried out airstrikes against Iranian backed targets in Syria. Separate reports indicated that Israel is expanding ground operations in Gaza. Participants learned about those developments right before the weekend when market's are closed for trading and investors can't react in real-time.

There was a heavy news flow this week in addition to the aforementioned headlines and earnings news. The headlines included Ford (F) and the UAW reaching a tentative agreement, the ECB leaving its corridor of key interest rates unchanged following ten consecutive rate increases, and a batch of economic data.

The economic calendar was highlighted by a whopping 4.9% real GDP growth in the third quarter and a September Personal Income and Spending report that failed to show a strong trend of disinflation. Those reports reflect ongoing strength in the economy and inflation that looks somewhat sticky, which is not likely to persuade the Fed to cut rates anytime soon.

Treasuries were better behaved this week, but that did not help stocks much. The 2-yr note yield declined six basis points to 5.03% and the 10-yr note yield fell seven basis points to 4.85%.

In other news, Rep. Mike Johnson (R-LA) was elected Speaker of the House after receiving unanimous Republican support.


DJIA 33127.20 32417.50 -709.70 -2.1 -2.2
Nasdaq 12983.80 12643.00 -340.80 -2.6 20.8
S&P 500 4224.16 4117.37 -106.79 -2.5 7.2
Russell 2000 1680.79 1636.94 -43.85 -2.6 -7.1




MONDAY 10/23

The stock market started, and ended, this session on a softer note. There was a nice rally, however, that began around mid-morning as stocks climbed and Treasury yields, which had already been moving lower, declined further. Upside moves had the S&P 500 back above its 200-day moving average (4,235) after the index slipped below the 4,200 level right out of the gate, hitting 4,189 at its low.

The rally effort coincided with an X post from hedge fund manager Bill Ackman, who said he had covered his short in bonds because "There is too much risk in the world to remain short bonds at current long-term rates." The 10-yr note yield moved from 4.97% to as low as 4.84% following his remark and the S&P 500 hit an intraday high of 4,255.

The turnaround effort for stocks, however, faded in the afternoon session. The S&P 500 closed below its 200-day moving average, sporting a 0.2% decline. Relative strength from the mega cap space limited downside moves for the S&P 500 and Dow Jones Industrial Average while the Nasdaq Composite (+0.3%) closed with a small gain. The Invesco S&P 500 Equal Weight ETF (RSP) fell 0.6%.

Market breadth reflected a lack of conviction on the part of buyers that was related to rising tension in the Middle East, along with hesitation about where rates are headed and the pickup in earnings reports this week.

There was no U.S. economic data of note on Monday.


The S&P 500 broke a five-day losing streak and closed above its 200-day moving average (4,236). All the major indices closed with gains, albeit off their highs, driven by broad based buying. Stocks hit an air pocket, though, around 11:00 a.m. ET and pulled back to session lows.

There was no specific catalyst to account for the mid-morning pullback that coincided with some mega caps dipping into negative territory. 

The overall positive bias was partially a function of recent weakness stirring a rebound mentality. Participants were also digesting a slate of mostly better-than-expected earnings results from blue chip names.

Bank stocks were a pocket of weakness today related to lingering concerns about credit quality, deposit costs, and weakening loan demand.

Tuesday's economic data was limited to the preliminary October S&P Global US Services PMI, which climbed to 50.9 from 50.1, and Manufacturing PMI, which rose to 50.0 from 49.8.


Wednesday's trade brought many stocks lower, leaving the major indices near their lows of the day. The S&P 500 closed above its 200-day moving average on Tuesday, but opened below that key level on Wednesday before ultimately settling below 4,200. The disappointing price action itself acted as a downside catalyst, along with a jump in rates and a big loss in Alphabet (GOOG) following an earnings report that contained some relatively disappointing growth for its cloud business.

Microsoft (MSFT) was a winning standout after reporting some impressive growth for its Azure business, but other mega caps slid alongside Alphabet. 

General Dynamics (GD), Visa (V) and Waste Management (WM) also registered gains after impressing with their quarterly results while Boeing (BA) and Texas Instruments (TXN) saw sizable declines.

Yields were already moving up, but turned higher in response to the release of the September New Home Sales report, which showed the strongest annual rate of sales (759,000) since February 2022. Another wave of selling hit the Treasury market following a $52 billion 5-yr note sale that met dismal demand.

Reviewing Wednesday's economic data:

  • Weekly MBA Mortgage Applications Index -1.0%; Prior -6.9%
  • September New Home Sales 759K (Briefing.com consensus 683K); Prior was revised to 676K from 675K
    • The key takeaway from the report is that new home sales activity in September picked up noticeably, aided by lower prices and reportedly mortgage rate concessions from builders.

Thursday's trade ended on a downbeat note. The biggest factor driving index level price action was relative weakness in the mega cap space. Meta Platforms (META) logged a sizable decline after reporting better-than-expected earnings and relatively disappointing guidance.

Market participants were also digesting a heavy news flow that included a slate of earnings reports, Israel staging a raid on Gaza in preparation for next stages of the war, Ford (F) and the UAW reaching a tentative agreement, the ECB leaving its corridor of key interest rates unchanged following ten consecutive rate increases, and a batch of economic data before the open.

Treasury yields moved lower in response to the data, but stocks did not react positively to that development.

The S&P 500 fell to 4,127 at Thursday's low, which was a 10% pullback from the July 31 closing level. Buyers showed up there, however, to offer some support and help the major indices climb off session lows. The bounce stalled out, though, with about an hour left in the session. Renewed selling activity had the S&P 500 close just above "correction" territory.

Still, the broader market was showing signs of resilience.

Reviewing Thursday's economic data:

  • Weekly Initial Claims 210K (Briefing.com consensus 210K); Prior was revised to 200K from 198K; Weekly Continuing Claims 1.790 mln; Prior was revised to 1.727 mln from 1.734 mln
    • The key takeaway from the report is that the level of initial jobless claims does not suggest the labor market is weakening in a material way at this juncture.
  • September Durable Orders 4.7% (Briefing.com consensus 1.5%); Prior was revised to -0.1% from 0.2%; September Durable Goods - ex transportation 0.5% (Briefing.com consensus 0.3%); Prior was revised to 0.5% from 0.4%
    • The key takeaway from the report is that business spending continued to increase, evidenced by the 0.6% increase in nondefense capital goods orders excluding aircraft.
  • Q3 GDP-Adv. 4.9% (Briefing.com consensus 4.0%); Prior 2.1%; Q3 Chain Deflator-Adv. 3.5% (Briefing.com consensus 2.7%); Prior 1.7%
    • The key takeaway from the report is that the Q3 GDP report was nearly every bit as much as what the Atlanta Fed GDPNow model estimated it would be (5.4%), which is to say economic activity surged in the third quarter on the back of the consumer, shedding some objective light on why the Fed remains inclined to keep rates high for longer.
  • September Adv. Intl. Trade in Goods -$85.8 bln; Prior was revised to -$84.6 bln from -$84.3 bln
  • September Adv. Retail Inventories 0.9%; Prior 1.1%
  • September Adv. Wholesale Inventories 0.0%; Prior -0.1%
  • September Pending Home Sales 1.1% (Briefing.com consensus 0.5%); Prior -7.1%
FRIDAY 10/27

The major indices all closed near session lows. Negative price action had the S&P 500 (-0.5%) test the 4,100 level, hitting 4,103 at its low. Friday's close marked a 10.3% decline in the S&P 500 from the July 31 high (i.e. a technical correction). Meanwhile, a big gain in Amazon.com (AMZN) following better-than-expected earnings and guidance helped support the Nasdaq Composite, which closed with a 0.4% gain.

Other mega caps outperformed alongside Amazon, as evidenced by a 0.5% gain in the Vanguard Mega Cap Growth ETF (MGK). Semiconductor stocks were another pocket of strength after Intel (INTC) beat earnings estimates. The PHLX Semiconductor Index climbed 1.2%.

Just about everything else aside from mega caps and semiconductor stocks declined. Eight of the 11 S&P 500 sectors decline with six of them registering losses larger than 1.0%. The energy sector (-2.3%) was the worst performer by a wide margin thanks to losses in Chevron (CVX) and Exxon Mobil (XOM) after they reported earnings.

The financials sector (-1.9%) was the next worst performer, weighed down by a loss in JPMorgan Chase (JPM) after CEO Jamie Dimon confirmed that he and his family plan to sell a portion of their holdings.

The negative bias was partially driven by geopolitical angst after reports that the US carried out airstrikes against Iranian backed targets in Syria, and separate reports that Israel is expanding ground operations in Gaza. Participants learned about those developments ahead of the weekend when market's are closed for trading and investors can't react in real-time.

Reviewing Friday's economic data:

  • September Personal Income 0.3% vs Briefing.com consensus of 0.4%; Prior 0.4%; September Personal Spending 0.7% (Briefing.com consensus 0.5%); Prior 0.4%; September PCE Prices 0.4% (Briefing.com consensus 0.3%); Prior 0.4%; September PCE Prices - Core 0.3% (Briefing.com consensus 0.3%); Prior 0.1%
    • The key takeaway from the report is that the PCE Price Index and the core PCE Price Index had a sticky feel to them, meaning they lacked a stronger trend of disinflation. That is apt to keep the Fed in a more hawkish mindset, which doesn't mean the Fed will be moved to raise rates soon. What it does mean is that the Fed won't be thinking about a rate cut anytime soon.
  • October Univ. of Michigan Consumer Sentiment - Final 63.8 (Briefing.com consensus 63.1); Prior 63.0
    • The key takeaway from the report is that the decline relative to the final September reading was owed to weakening sentiment among higher-income consumers and those with sizable stock holdings. Furthermore, expected business conditions weakened among all consumers and year-ahead inflation expectations jumped back to a level last seen in May.
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The data provided is for informational purposes only and is not an endorsement of any security, mutual fund, sector, or index. The information contained here is not guaranteed as to accuracy or completeness. All economic and performance information is historical and does not guarantee future results.

The Dow Jones Industrial Average is a price-weighted index comprising 30 widely traded blue chip U.S. common stocks. The NASDAQ Composite Index is a market-value-weighted index of all common stocks listed on the NASDAQ stock exchange. The S&P 500 Index tracks the performance of 500 of the largest publicly traded companies in the United States. The MSCI Europe, Australasia, and Far East (EAFE) Index tracks the performance of publicly traded large- and mid-cap stocks of companies in those regions. The Cboe Volatility Index (VIX) shows the market’s expectation of 30-day volatility and is constructed using the implied volatilities of a wide range of S&P 500 Index options. Weekly and year-to-date figures for the VIX show percentage changes, not investment returns. The Russell 2000 Index tracks the performance of approximately 2,000 publicly traded small-cap companies in the United States. It is not possible to invest directly in an index.

The Treasury yield curve is derived from available U.S. Treasury securities trading in the market and is provided directly by the U.S. Federal Reserve. The spread measures the difference in yield between two government securities. A normal (positive) yield curve occurs when longer-term rates are higher than shorter-term rates. The opposite holds true for an inverted yield curve. Year-to-date changes in U.S. Treasury bond yields are shown in basis points (bps). One hundred basis points equals one percent.

Oil prices are represented by West Texas Intermediate (WTI) crude oil.

The G20 countries comprise a mix of the world’s largest advanced and emerging economies, representing about two-thirds of the world’s population, 85% of global gross domestic product, and over 75% of global trade.